HEALTH

Republicans Look to Medicaid as Winner Issue

Senate Finance ranking member Orrin Hatch, R-Utah, thinks repealing a piece of the health reform law that keeps states from kicking people off their Medicaid rolls could hitch a ride with legislation to raise the government’s debt limit. But he says state governors need to build support for that effort.

“I think we’ve got a shot at putting that in there, but we’ll just have to see. The governors have to build the support for it, and they have to help us on that, and I think they will,” Hatch told National Journal Daily on Tuesday.

While Democrats keep hammering Republicans over a House budget that would turn Medicare into a voucher program, Republicans have been trying to shift the focus back to Medicaid.

Hatch and House Energy and Commerce Chairman Fred Upton, R-Mich., sent a letter to the governors Monday soliciting “ideas on how to make Medicaid work better.” Earlier this month, Hatch introduced a bill that would repeal a provision in the health reform law that says states can receive more Medicaid funding if they agree not to reduce eligibility requirements below their February 2009 levels.

The Energy and Commerce Health Subcommittee approved similar legislation on a party line. “I think most governors are with us on this, because they can’t live with what’s been done. Right now, mostly Republican governors are responding, and the Democrats are a little bit afraid, I think,” Hatch said Tuesday.

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Democratic governors have not been as vocal as Republicans in supporting a repeal of the law’s eligibility rules. In January, Gov. Christine Gregoire, D-Wash., in her role as National Governors Association Chair, sent a letter asking Congress to ease the financial strain on states by undoing a slew of federal requirements, including the Medicaid piece.

There is no question that state budgets are strapped, making Medicaid costs daunting for many governors. The National Association of State Budget Officers found that Medicaid represented the single largest chunk of state spending last year, nearly 22 percent.

Sen. Chuck Grassley, R-Iowa, former ranking member of the Finance Committee, said the politics of Medicaid was easier to navigate than Medicare, thanks in part to the state and local government funding, which covers about half of Medicaid’s costs on average.

“I would say Medicaid’s probably less politically sensitive,” said Grassley.

Beyond dropping the eligibility rules, which the Congressional Budget Office estimates would save $2.1 billion over 10 years, insurance companies are offering solutions to reduce the cost of Medicaid without driving down doctor and hospital reimbursements.

Thomas Johnson, CEO of the Medicaid Health Plans of America, spoke about the cost-saving practices used by managed Medicaid plans at a conference Tuesday.

Johnson said one plan from Centene Corp. reduced inpatient stays by 38 percent and emergency visits by 20 percent for chronic disease patients by assigning each a case manager who visited patients at home.

Another plan from the Group Health Cooperative of Eau Claire saw a 46 percent decrease in ER costs over two years by identifying asthma patients and coordinating preventive care to keep them out of the hospital.

“Reducing access to care or much needed benefits is not the right solution to lower costs. Instead, policymakers need to focus on the true cost driver within the health care system—chronic disease—and support long-term programs that help prevent and manage these conditions,” Ken Thorpe, executive director of the Partnership to Fight Chronic Disease, said at the conference.